Fonehouse guns for franchises

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In May last year, Fonehouse managing director Clive Bayley reckoned Fonehouse would sign 35 dealerships to its franchise programme by Christmas. The reality was only 16 joined the family.

But Bayley is slowly getting there. Another four dealerships had joined the Fonehouse group by the end of January, with three of them dropped a fortnight later for under-performing. And five new Vodafone solus franchises have been earmarked for the end of March.

Bayley is confident his reviewed minimum target of 50 franchise stores will be reached by the end of 2009.

The attraction for independent dealers to join the Fonehouse stable is tangible – access to better stock allocation and the kind of commercial terms that enable deals comparable with most high street offers, as well as a direct line to T-Mobile, and just recently Vodafone and 3 as well.

Dealers who join the franchise programme have their shops refitted with new Fonehouse signage, decor and point-of-sale material.

“This programme is starting to prove a real success,” remarks Bayley. “The failure to hit 35 stores [by the end of 2008] was a disappointment. But it couldn’t be going better now. I’m sure we’ll have 50 franchises to add to our own stores this year.”

So why is the franchise programme picking up speed? “Awareness of the programme is better now – some dealers are responding to the trade press adverts, and word of mouth does the rest; our existing franchisees tell us about other dealers who may be interested in joining us,” he says.

Bayley decided about a year ago conditions in the consumer sales channel were such that smaller dealers faced extinction. Networks were moving to cap third-party acquisition budgets and reduce spend in the dealer market. Bayley reckoned it was time for a large chain to stick its neck out, and offer smaller dealer brands refuge and a chance to be part of a bigger chain.

“The market was really changing. Independent dealers were hit by networks cutting back, and we thought it a good idea to offer them the umbrella of a successful brand. Fonehouse knows how to run a large retail estate and how to manage a brand on the high street,” he says.

Full article in Mobile News ussye 435 (March 23, 2009).

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